Douglas Stuart Ponsford & Anor v Mesud Habib Sali & Anor

A trust of land may be declared before the writing required by section 53(1)(b) of the Law of Property Act 1925 exists. The writing evidences and retrospectively validates the trust; it does not itself necessarily create it. A declaration need not be executed as a deed or witnessed if it is signed by a person able to declare the trust and sufficiently identifies the property, parties and trust. A receiver’s remuneration must be reasonable and proportionate, supported by the evidence required by the applicable procedural rules, and limited to work properly undertaken in the receivership.

The claim arose from the taking of accounts following the dissolution of an informal property partnership between Douglas Stuart Ponsford and Mesud Habib Sali. The court had to determine whether 2 Walsingham Road was a partnership asset or was held by Mr Ponsford on trust for Mr Sali; whether a 20% interest rate was agreed in respect of sums due from Mr Sali; whether 13 Mill Lane was a partnership asset; and the appropriate remuneration for Mr Ponsford as court-appointed receiver and manager.

1. The court declared that the declaration of trust was valid and that 2 Walsingham Road was held by Mr Ponsford on trust for Mr Sali.

2. Mr Sali established that, when the property was transferred into Mr Ponsford’s name in 2013, Mr Ponsford intended to hold it on trust for him. The property was treated differently from partnership properties, and the parties’ subsequent conduct corroborated the intended trust.

3. Section 53(1)(b) of the Law of Property Act 1925 requires written evidence of a declaration of trust relating to land. It does not require the declaration itself to be written and signed as a contractual agreement. A trust may therefore be declared before it is manifested and proved in writing, with compliance operating retrospectively.

4. The April 2021 declaration sufficiently manifested and proved the trust. Although drafted as a trust of the proceeds of sale and not executed as a deed, it identified the property, the parties and the trust. The absence of witnessing and dating did not prevent it from satisfying section 53(1)(b). Mr Ponsford signed and handed it over without establishing any condition that it should remain in suspense.

5. Mr Ponsford failed to prove a contractually binding agreement for 20% interest. The evidence was poor and contradictory, and no sufficient consideration for the alleged promise was shown.

6. It was common ground that 13 Mill Lane was not a Move on Now partnership asset, so the court found for Mr Ponsford on that issue.

7. The remuneration issue was adjourned. Under CPR rule 69.7(4) and PD69 paragraph 9.4, any remuneration must be reasonable and proportionate, supported by adequate written evidence and certification, and limited to work properly undertaken as receiver and manager after appointment. Time spent as partner or litigant must be excluded or appropriately allowed for. The claimed 15% of asset value and estimate of 35–50 hours per week were rejected as excessive and unsupported.